SAN JOSE — A veteran commercial real estate firm has begun to scout for well over $1 billion in financing for a trio of green towers in downtown San Jose while also revealing the timeline to construct the ambitious projects.
Cushman & Wakefield, a commercial real estate firm, is seeking to raise up to $1.5 billion in financing for the renovation of the Bank of Italy historic tower, as well as the development of two brand-new towers: the Park Habitat office and retail complex and the Orchard Residential housing highrise.
An alliance of mega-developer Westbank and local developer Urban Community is developing the trio of towers in downtown San Jose.
Cushman & Wakefield says it’s attempting to harvest the $1.5 billion in financing through a syndication approach that could involve pools of funds to bankroll the projects.
“There is tremendous growth happening in San Jose, the heart of Silicon Valley, right now,” said Dave Karson, vice chairman of Cushman & Wakefield’s finance, debt and equity unit. “That brings a lot of potential for supply” of new office and residential buildings.
The latest development timelines for the projects, according to Cushman & Wakefield:
— The Bank of Italy tower revamp and new construction at 12 S. First St: The ongoing renovation is slated to be complete in the summer of 2023. The project will include a new green staircase that will wind up the south side of the historic highrise as well as a garden terrace on the east side of the tower.
— Park Habitat, an office and retail tower at 180 Park Ave. began construction in April and is scheduled to be completed sometime in 2025. The environmentally friendly office and retail complex will total 1.2 million square feet and feature a series of gardens and a green lung that will enable people to work in a park.
— The Orchard Residential at 409 S. Second St. is slated to begin construction sometime this fall but a completion date is unknown. The project is being built next to the site of the now-shuttered Bo Town restaurant and will preserve the well-known dining establishment’s structure.
All three projects will feature wide-ranging use of gardens and greenery. They are three of the towers in what Westbank calls its San Jose “net-zero” downtown campus, which the developer hopes will be carbon neutral and environmentally friendly.
As the coronavirus era persists, Westbank and Urban Community hope their push to offer people ways to work in gardens and parks and live in green towers could help attract residents and office tenants to their downtown San Jose projects.
“We believe having differentiated net-zero product like this creates an exceptional investment opportunity,” Karson said.
Westbank and Urban Community are attempting to develop projects that can prod Silicon Valley to shift gears in how it approaches new office hubs and residential towers.
“It has never been more important to build projects that contribute positively to our cities and communities and that are sustainable, socially, environmentally and economically,” said Andrew Jacobson, Westbank’s vice president of U.S. development. “We’ve designed all of the projects in our initiative with that in mind.”
All told, Westbank and Urban Community have proposed seven major projects in downtown San Jose, including the three towers for which $1.5 billion in funding is being sought. The seven projects include both offices and housing.
The seven Westbank projects in downtown San Jose are expected to create a combined 4 million square feet of office space — the equivalent of two or three major regional shopping malls — as well as 1,000 rental residences.
“We’re confident the first three projects will create value in San Jose and beyond,” Jacobson said. “We’re looking forward to working with investors who share our commitment to supporting the future growth and success of cities through projects of this kind.”
Downtown San Jose green tower projects seek billion-plus in financing
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